Correlation Between Salesforce and Grupa HRC

Can any of the company-specific risk be diversified away by investing in both Salesforce and Grupa HRC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Salesforce and Grupa HRC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Salesforce and Grupa HRC SA, you can compare the effects of market volatilities on Salesforce and Grupa HRC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Salesforce with a short position of Grupa HRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Grupa HRC.

Diversification Opportunities for Salesforce and Grupa HRC

-0.88

Correlation Coefficient

Salesforce  Grupa HRC

Pay attention - limited upside

The 3 months correlation between Salesforce and Grupa is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Grupa HRC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupa HRC SA and Salesforce is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Salesforce are associated (or correlated) with Grupa HRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupa HRC SA has no effect on the direction of Salesforce i.e., Salesforce and Grupa HRC go up and down completely randomly.

Pair Corralation between Salesforce and Grupa HRC

Considering the 90-day investment horizon Salesforce is expected to generate 0.36 times more return on investment than Grupa HRC. However, Salesforce is 2.78 times less risky than Grupa HRC. It trades about 0.24 of its potential returns per unit of risk. Grupa HRC SA is currently generating about -0.16 per unit of risk. If you would invest  26,486  in Salesforce on August 25, 2024 and sell it today you would earn a total of  7,716  from holding Salesforce or generate 29.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	52.31%
Values	Daily Returns

Salesforce  vs.  Grupa HRC SA

Salesforce

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Grupa HRC SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupa HRC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Salesforce and Grupa HRC

The main advantage of trading using opposite Salesforce and Grupa HRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Grupa HRC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Grupa HRC will offset losses from the drop in Grupa HRC's long position.

The idea behind Salesforce and Grupa HRC SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.